SALEM -- Oregon's school districts would get a total of $5.56 billion in state aid over the coming two years, under the budget Gov. John Kitzhaber plans to submit to lawmakers next week.

That's slightly higher than they got this year, after being forced to trim hundreds of millions because of recession-caused cutbacks. But its a long way from the nearly $7 billion schools say they need to keep up with inflation and population growth.

Kitzhaber announced his figures after meeting with newspaper editors from around the state. His spokesman, Tim Raphael, said there was some confusion over the school budget number after the governor spokes to editors.

In recent months, Kitzhaber has talked about $5.4 billion as a "starting point" for schools. The higher number reflects what Raphael termed a "strategic investment" in schools, using additional money Oregon is expected to get from income taxes and lottery profits.

Kitzhaber said he wants to "front load" the two-year school budget by spending 52 percent, or $2.9 billion, in the first year. "The effect is to provide an increase in state funding for the 2011-12 school year," he said. And, he said, it give schools a chance to find cost savings "through consolidation and other efficiencies" for the next year.

Kitzhaber also announced his spending plans for health care. His budget calls for $2.3 billion for the Oregon Health Authority, which oversees the Oregon Health Plan. Although it's an increase of $350 million from the current budget, it does not make up for about $800 million in one-time federal stimulus money the agency received.

"Cut in benefits and provider payments will be required to manage reduced revenues in the first year," Kitzhaber said. In the meantime, the state will look at ways to save money by integrating physical and mental health and long-term care, by providing incentives for disease prevention and by using "community-based management" for chronic conditions, such as diabetes.

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